Australia’s labor market report was published today that indicated continual decelerating pace in jobs growth. Employment grew only 0.1% 3m/3m as compared with the growth of 0.9% in the prior three months. However, the jobless rate remained stable at 5.7% in April. This implies that Australia’s labor market continues to be resilient. Australia’s jobless rate is likely to continue to be close to the current 5.7% for the remainder of 2016, according to ANZ.
Recently, certain indicators of labor market have come in mixed. For the past six months, ANZ job ads have been quite flat, while a jobless rate based on welfare payments rose in March. However, indicators such as profitability and capacity utilization in the business surveys indicate a strong labor market, noted ANZ in a research report.
But, a preliminary data on the Fed-style labor market conditions index remained the same last month, suggesting that the labor market in Australia continues to be strong after 2015’s sharp rebound was eased, added ANZ.
Meanwhile, even if the Reserve Bank of Australia’s focus has moved to the outlook of inflation, labor market developments remain vital for monetary policy discussions. April’s job numbers published today are expected to be widely as the central bank expected, noted ANZ.
“We continue to expect another 25bp rate cut in August given the sharp downgrade to its inflation forecast”, said ANZ.
